1.) The "real estate professional" contingency as it pertains to passive losses is an unfair tax loop hole that is not functioning as it was originally intended to do. We need to eliminate this tax contingency.
2.) Provide 50% bonus depreciation during the first year that an investment property is put in service. Ordinarily, depreciation is taken over 27.5 years for residential real estate investments. Under my proposal the new class of real estate professionals would take half of this depreciation in year one. The second half of the depreciation would be taken over the remaining 27.5 years that the property is in service.
3.) The 50% bonus depreciation allowance will expire from one year of the passage of the new legislation. By setting a deadline it will provide a motivation for Americans to take action.
4.) This proposal applies only to individuals that put a property in service after this legislation has been approved into law by the President. The focus is on the most wanted response, new real estate investment. It is not designed to give tax breaks to people that have already invested. In other words, the investments that individuals have made prior to this new legislation will still apply to the old Tax Reform Act of 1986.
